The first face-to-face meeting between the EU and the United States since the White House imposed tariffs on imports to the US will take place on Monday when EU trade commissioner Maroš Šefčovič meets commerce secretary Howard Lutnick and US trade officials in Washington, DC.
EU countries including Ireland will be watching anxiously for a sign that substantive negotiations with the US to avoid a damaging trade war can begin soon – but this weekend senior officials in Dublin and Brussels were hopeful, rather than confident of this.
Dublin is especially concerned that pharmaceuticals – which comprise the great bulk of Irish exports to the US – should be part of the overall negotiations.
The EU and Ireland expect that if pharma exports are part of the broader trade negotiations, they are unlikely to be hit with special tariffs, despite repeated threats by President Donald Trump to impose tariffs on the sector soon.
Taoiseach Micheál Martin is due to meet pharma bosses this week, but high-ranking EU and Irish sources admitted they don’t yet know whether the US will accede to EU requests to include pharma in the overall talks.
But Ireland is also wary of an EU response that includes a digital services tax on US tech giants – a move the Taoiseach told The Irish Times he would oppose and which Minister for Public Expenditure Jack Chambers said on Sunday would signal that “we’re at a point of enormous damage for the Irish economy”.
The unpredictability of the US position was further underlined over the weekend when the Trump administration said that it would exempt smartphones, computers and some other electronic goods from its so-called reciprocal tariffs.
The exclusions, published late on Friday by US Customs and Border Protection, narrow the scope of the levies by excluding the products from Trump’s 125 per cent China tariff and his baseline 10 per cent global tariff on nearly all other countries – though the White House later indicated that Chinese products would still face an earlier 20 per cent tariff.
The announcement came as a relief to Apple, a major Irish taxpayer which manufactures smartphones in China and which saw its share price plummet last week, knocking more than $600 billion (€528 billion) off the company’s value.
However, Mr Lutnick said on Sunday that the exemption was not permanent and such products would be re-examined as part of a government investigation into semiconductors, which face a separate round of tariffs.
Senior EU and Irish sources say they hope that Monday’s meeting can lay the groundwork for detailed negotiations between the EU and the US over the coming months. There is hope on the EU side that concessions to the US, such as easing existing tariffs on US cars and undertaking to purchase more American liquefied natural gas, could pave the way for the Trump administration to claim victory and set aside its EU tariffs.
But the unpredictability of President Trump makes any expectations about the future unreliable.
It is this uncertainty that is spooking global markets, which will be closely watched on Monday morning for signs of a continuing sell-off in US assets, identified by many analysts last week.
Some market analysts say the Trump tariffs – and the increasingly unilateralist position of the US more generally – is prompting a retreat from US shares and bonds, a trend that could make financing the US government’s huge deficit more difficult.
A move away from US assets could also endanger the position of the dollar as the world’s reserve currency – a move that would have far-reaching implications for the global financial system.
EU foreign affairs ministers, including Tánaiste Simon Harris, are expected to discuss the US tariffs on the margin of a meeting in Luxembourg on Monday, though the agenda is dominated by Ukraine and Israel-Palestine.
